Euro zone: Negative interest rates have only drawbacks for Germany

Long-term interest rates have become very negative in Germany in August 2019 as a result of: The Federal Reserve's rate cut and the prospect of ECB rate cuts; The decline in euro-zone expected inflation given that inflation remains very low; The periodic return of political risk in Italy; The accumulation of international risks. The advantage of zero or negative long-term interest is that they make all categories of economic agents solvent, but this has no purpose in Germany where the government, households and companies are solvent. On the contrary, the solvency gain is significant for the government in France and Italy, for households in France, and for companies in Spain and France. So for Germany, there are only drawbacks in negative interest rates , especially the hardship for savers and future pensioners, who react by increasing the household savings rate due to the income effect.